Published in Economic Development

Michigan utility looks to meet renewable energy needs of large customers

BY Sunday, April 03, 2016 03:24pm

JACKSON — Michigan’s second-largest electric utility says it is developing a program to meet the needs of large energy users who want more of their electricity to come from renewable sources.

Consumers Energy’s business customers are driving the push for alternative energy even more than state policy mandates, said Nancy Popa, executive director of renewable energy for the Jackson-based utility.

“Historically, adding renewable energy to our portfolio was largely driven by policy because of cost,” Popa said. “It’s just kind of interesting to me that we’re looking at new renewable energy and it’s not being driven by policy or cost — it’s being driven by customers wanting more renewable energy. It’s really a new paradigm.”

Consumers Energy still needs to determine the details about its new program. However, the utility remains in the process of interviewing its large customers “to better understand what they’re looking for in a renewable energy program that will allow them to go up to 100 percent renewables,” Popa said.

“We’re getting some interesting responses and are evaluating what generating resource makes the most sense,” she said, adding that Consumers will issue a request for proposals for either wind or solar in the first part of April.

The program may include purchasing renewable energy credits or some kind of “financial transaction around energy,” Popa said. 

As of yet, it remains unclear what the load size will be and to what extent the utility will rely on third-party developers to meet the demand.

From a financial standpoint, one of the main benefits to renewables is that they provide an “energy price hedge,” or an opportunity for fixed pricing on energy because there are no fuel costs for renewables, unlike with natural gas and coal.

Customer demand for renewable energy also brings “interesting repercussions,” Popa added.

“Because we’re building new renewable energy because customers are interested, what happens to the existing resources? We’re not building because of electric demand, but because of customer demand,” she said.

Indeed, the business sector worldwide is driving renewable energy deployment. 

According to a recent report by the national trade group Advanced Energy Economy, 43 percent of Fortune 500 companies and 60 percent of Fortune 100 companies had set “climate and/or clean energy targets” as of 2014.

In February, Grand Rapids-based office furniture manufacturer Steelcase Inc. signed a 12-year deal for 25 megawatts of wind power being built in Oklahoma. 

General Motors was one of the first signatories to the Corporate Renewable Energy Buyers’ Principles, a consortium of major companies committing to deploying renewables.

Las Vegas-based Switch Ltd. hinged its decision to open a $5 billion cloud-based data center in Gaines Township south of Grand Rapids on whether 100 percent of its energy needs could be met with renewables. However, under Michigan’s 10 percent electric choice law, corporations here are limited in their ability to purchase renewable energy from alternative suppliers.

A Switch official told MiBiz in February that the company is working with Consumers to establish a “green rider tariff,” a mechanism by which large energy users can purchase renewable energy from their utility within a regulated market like the one in Michigan.

“There are interesting things going on here where existing renewable assets aren’t good enough anymore,” Popa said. “It reminds me of the analogy of the iPhone 6 coming out and making the iPhone 5 obsolete very quickly.”

Popa also said it’s important that participating customers “be truly committed to publicly committing to increasing renewable energy and not opening it for everyone. If everyone joined, we would have stranded assets.” 

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